What happens when you achieve your dreams both financially and personally but don’t know how to manage them?
Young sportspeople have clear goals in sight from a very young age. The training and support provided to that young person to get them to professional level is all consuming. There is often little time to teach them how to manage their finances.
One of the biggest gains of becoming a professional sportsperson or competing athlete is – MONEY. This sudden change in status and spike in income can become overwhelming to someone who has never had to manage this type of wealth before.
In this article we shall help you to understand:
— Goal based financial planning
— The top 3 principles to financial freedom
— The 3 values to financial independence
We understand that all you’ve wanted to do since you could remember is play, run, jump, compete, and win. You probably didn’t realise in the early days that besides training and competing, understanding how to manage your money is hugely important. Understanding the fundamentals, or how to choose someone else to manage your money is vital maintaining and building wealth.
Goal based financial planning
How did you see yourself when you were younger?
What does the future look like for you as an athlete?
Mapping out your Financial Goals will help you keep the wealth you have earned.
Your body is made to do what you do – you were destined to be on the pitch. But what did you plan to do with all the money you would come to earn?
Trust us. This is a good problem to have. However, if left unmanaged, it could be very detrimental to your career and lifestyle.
When you were younger perhaps you just imagined the glory, the fame, the wealth, the fun?
We’re here to tell you how to KEEP all of that for as long as possible in a safe, calculated, low risk way.
Boring?
Check out some of the existing celeb athletes who are not just sports professionals but also business people.
What do you think of when we talk about Cristiano Ronaldo?
Portuguese football player right?
He’s so much more…
The legendary Real Madrid football player has used his sports salary to grow his empire and multiply his wealth.
But why?
Goal based planning is designed to help you extend your hard-earned successes and protect them.
The biggest questions you should be asking yourself are:
— What would I do if the worst were to happen?
— What if I couldn’t perform anymore due to an injury, how would I continue to get paid?
— What if my career doesn’t “take off” as planned? How else would I earn money?
— What happens if my sporting career is cut short? How will I sustain my lifestyle?
— What if I spend it all too fast?
— What happens when my career comes to an end? Have I got any other opportunities lined up?
As one of the highest paid athletes in the world, earning millions, you’d think the questions above wouldn’t bother Ronaldo right?
He makes it his business to put into action every contingency plan and back up plan possible to ensure the questions above have a happy ending.
His business empire consists of: sporting income, sponsorship deals such as Tag Heuer and Nike, invests in real estate across the whole world from Madrid to New York City, also owns a football themed hotel in Madeira and much more.
Goal based planning is there to help you stay on track with your goals from a financial aspect. You can have all the luxury you desire if you plan for it.
The 3 Principles to financial freedom
Financial freedom is having money work for you when you don’t have to. Whereas many people are paid a salary and trade their time for money, having passive income means that you don’t have to physically work for money.
Let us explain.
Training and playing as an athlete requires you to physically be present or else you don’t get paid.
Having rental properties with tenants paying a regular fee, means your properties are generating you money without you being there. Equally, having a sponsorship deal where your name can be used with a supporting brand, can be a repeat source of income without you always having to be there in person.
We help you build many pockets of passive income alongside your sporting career. For example: ISAs, Stocks and Shares, Bonds, Pensions, Real Estate etc.
Here are our top 3 investment principles to help build lifelong wealth
1. Invest to grow
2. Have a 6 to 9 month saving pot to cover all expenses, including discretionary and essential spend. How lavish do you want to live your life?
3. Invest in the most tax efficient way possible. Keep your gains rather than give some of them back.
Either speak to us directly, or have your manager connect with us, if you want to understand how to set this up efficiently.
Financial Independence
In this section, we want you to learn to have total financial independence. This means, not relying solely on your paid income from your sporting career because, what would you do if this income were to stop?
Some sporting careers end early, abruptly or unexpectedly. If you were to continuously live to the maximum and spend all the pennies you earned, then when they suddenly stop coming in you wouldn’t have enough money to continue living the way you’ve always lived.
This is soul crushing.
Imagine living like a rockstar everyday, and then one day (potentially, not always) have it taken away.
Here are the 3 core principles you need to follow if you want your career to be financial proof and long lasting:
1. Money mindset
What is your relationship with money? How do you treat money?
Mindset is all about how you think, talk, behave and use money. We often see newly formed athletes, and other celebrities for that matter, who acquire new money, tend to overspend. Not being used to this type of lifestyle, they overindulge in the ability to spend without thinking.
That’s the key. NOT thinking.
The consequence to this is overspending.
Let’s be very clear – we want you to live the lifestyle you’ve always dreamed of without limitations, but in a way that can be sustainable.
We’re not blocking your desire to spend and enjoy yourself. We’re here to enhance the value of your earning and give longevity to your lifestyle.
We work with athletes and other professionals regularly on their mindset towards money. You are also welcome to embark on this learning journey via our YouTube webinars.
2. Knowledge – you need to be financially educated
Knowledge comes in many forms. One form we are huge fans of, other than webinars, is books!
Our top favourite books that we recommend to boost financial literacy are:
— The Warren Buffett Way
— Rich Dad Poor Dad
— Your Money Your Life
— The Intelligent Investor
3. Support: surround yourself with a Power team
As a child, you potentially didn’t realise how much help and support you needed if you wanted to make it as an athlete.
You’re likely to regularly be surrounded by: a coach, a physiotherapist, a manager, a team, family, team members, academies etc.
In finance, it’s just as important.
If you want to grow as a sports professional, you need to have the right management, training and emotional support around you.
If you want to grow your wealth, then you need to have the right advisers around you too.
Working with a financial advisor can be hugely beneficial because:
1. They can save you time
2. A financial advisor can manage your funds or simply guide you on how to do it yourself
3. An advisor can find you the best products that will accelerate the growth of your wealth
4. They can teach you
Depending on the experience and age of the sportsperson, we would either work directly with the athlete or their manager/parent.
Either way, you have a team of professionals who are invested in your growth.
Take the first leap today – learn about how to invest and protect your wealth by signing up to our webinars or speaking with your lead adviser David Gregory for a free consultation.
